PC industry will continue to thrive, Dell says
By Johanna Ambrosio
computerworld.com
AUSTIN, TEXAS -- The boom years for the PC industry aren't over,
despite some observers' fears to the contrary, said Michael Dell,
chairman and CEO of Dell Computer Corp. Long-term economic
factors and technology trends will continue to spur growth, he said.
Dell made those remarks here today at a meeting of the Society of
American Business Editors and Writers, a national group representing
business journalists.
Technology and economic factors together will bring about a "new
wave of progress in our industry," he said. In fact, "We don't see this
as the year that the PC market will blow up," Dell said. "We believe
the growth in our market will continue to be in the double-digit range
for quite some time."
Overseas markets are particularly ripe for continued PC expansion,
he said. China, with 1.3 billion people and a $1 trillion gross
domestic product, will become one of the top three PC markets within
"a few years," he predicted, with that market growing around 30%
per year, Dell said.
He also said that both Latin America and Europe promise growth
potential for the PC market. "When you go to Italy, you go to
Germany, you find they're only just beginning to understand how
technology can help ... make them more productive. ... There's an
understanding that this [technology] is a major catalyst for progress in
the economy."
On the technology front, he pointed to several issues that will help
push PC growth: "the miracle of semiconductors," the year 2000
issue, Windows NT's increasing popularity, the Internet and the
growth of broadband communications -- particularly services that
target consumers and smaller companies.
He also sees a "massive replacement cycle" going on because of
the year 2000 problem, he said. A year or two ago, many
corporations were buying new applications to fix the millennium bug.
Now they're installing those applications, which "don't run" on older
PCs, such as 486s, Dell said.
The next big replacement boom will be spawned by Windows NT, he
said. Already Dell is selling NT with about 30% of the machines
going to corporate buyers.
On the broadband front, Dell said his company is working to help
bring broadband into homes for one major reason: More than half of
the people who get cable modems replace their PCs in the first year.
"The old 486 isn't good enough anymore," he said.
But even large companies, which have had broadband access for
quite some time, can find new ways to use the technology. At Shell
Oil Co., which has around 7,500 PCs installed, Dell has proposed
that "employees have broadband access to the Shell IT network from
home. Interesting possibilities occur -- disaster recovery, training --
and the cost of this stuff is well within what these companies consider
to be reasonable."
Other issues that Dell touched on during his talk included the
following:
The impact of the Department of Justice possibly breaking
Microsoft Corp. into different divisions: "That depends on how
they break it up. ... I could make a case that if they split
Microsoft up, the cost of software will go up, not down."
Dell's stance: "Let the court figure out what it's going to do,
and we'll do our best to stay out of the way."
Dell said that despite worldwide economic woes, his company
isn't changing its strategy.
"We've been able to gain share even in a market that's
declining because we have the cost and service advantage.
Even in Japan, where arguably the fundamentals of the
economy are not very good, we've been growing in the high
double-digit rates and are profitable.
"The last three years, the top four companies in our industry
grew at 33%. In the first half of this year, we've grown at
around 70%. So we certainly haven't seen a slowdown.
Will Dell sell Linux? "If we see an economic reason to sell it,
we will. We've seen some limited interest."
How will Dell continue to scale its servers, and are there any
acquisitions planned to help them get there a la
Compaq/Digital? "We've been able to grow our business very
successfully without any acquisitions. About two weeks ago,
we demonstrated a 64-processor, 10T-byte system running
DB2 that outperformed ... essentially a mainframe. It cost less
than the monthly maintenance fee for the computer it
replaced."
"We have moved from being a fast follower to being a
technology leader in the server world, and the business is
coming in very quickly."
That said, however, Dell said his company will continue to
partner "with companies in software/services businesses to
provide things our customers may want." |
